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Regulatory Wrap-Up: Weekly recap of retail-related legislative developments-March 18

BY CSA Staff

Wages

Arkansas – A house committee advanced legislation to roll back part of the voter-approved increase in the minimum wage. It would exempt workers under twenty-one years of age from the increase, essentially establishing a training wage at the previous minimum wage level, $7.25/hr. The legislation may face an uphill fight.

Colorado – The house passed legislation to repeal the state’s minimum wage preemption which bars local governments from having a wage rate that is different than the statewide minimum, currently $11.10/hr or $8.08/hr for tipped employees. Action now moves to the senate where passage is likely.

Florida – A proposed constitutional amendment that would raise Florida’s minimum wage to $15/hr has cleared its first hurdle. The political committee, Florida For A Fair Wage, submitted 87,528 valid petition signatures to the state, making the proposed amendment eligible for review by the state supreme court.

Maryland – The senate gave initial approval to legislation raising the minimum wage to $15/hr by 2025 with a final vote scheduled for late Friday. Some minor differences regarding implementation dates and eligibility have to be reconciled with the house-passed bill. The Governor has indicated he will veto the final package but both chambers likely have the votes to override.

Minnesota – A senate committee advanced legislation to preempt localities from setting their own wage and benefit levels. The legislation is largely symbolic because it is dead on arrival in the house which is controlled by Democrats. The bill is also opposed by the governor.

New Hampshire – The house approved legislation that would raise the minimum wage $12/hr by 2020. Many in the chamber had preferred an increase to $15/hr. The senate is also considering an increase but the governor continues to remain opposed.

New Mexico – Compromise legislation was advanced that incrementally raises the minimum wage to $12/hr by 2023. The tip wage will gradually increase to $3/hr and a student wage of $8.50/hr was included. Absent from the final package was language that would include an automatic, annual cost-of-living escalator. The governor is expected to sign the bill.

Costco – For the second time in less than a year, Costco is increasing its starting wage, this time to $15/hr. They had announced an increase to $13/hr late last year.  Costco, Amazon and Target are all now – or soon will be – at the $15/hr level.

Paid Leave

Federal – Two Republican senators have introduced legislation that would allow parents three months of paid leave by allowing them to defer their social security benefits. Republican Senator Marco Rubio proposed a similar program in the last Congress but it is unlikely that the newly-introduced bill will garner any Democratic support.

Federal – In his budget, President Trump called for six weeks of paid leave for new and adoptive parents but details on administering and financing the program are up in the air.

Colorado – A senate committee advanced a bill to establish a state-run insurance fund for paid parental leave and other health emergencies. The bill would be funded by a payroll deduction of .64% split between the employer and employee. It is likely to continue advancing through the process and become law.

Connecticut – The governor is pushing a more modest parental leave proposal than what has been under consideration in the legislature. Under the governor’s proposal, employers that currently provide paid leave programs would be exempt. For everyone else, a paid leave fund would be financed with a .5% deduction paid by the employee.

Maine – Legislation to mandate one hour of paid leave for every 30 hours worked passed its first legislative committee. Both the governor and legislative leaders have been supportive of paid leave legislation so final passage of a bill is likely.

Amazon – Amazon is the latest company to announce an expanded parental leave policy. The retailer will begin offering fathers six weeks of parental leave. New mothers are eligible for 20 weeks.

Labor Policy

No-Poach Agreements – Numerous attorneys general have followed Washington Attorney General Bob Ferguson’s lead and pursued actions against franchise systems that include no-poach agreements in their franchise contracts. Recently, major chains including Arby’s, Dunkin Brands, Five Guys and Little Caesars, entered an agreement with attorneys general in thirteen states and the District of Columbia (over fifty chains have entered into agreements with Ferguson’s office). Meanwhile, the Justice Department is challenging Ferguson in federal court, arguing that no-poach agreements are legal and do not violate antitrust laws. Finally, Republican Senator Marco Rubio has filed legislation that would limit employers’ ability to enter into non-competition agreements with certain entry-level, low-wage employees.

Minnesota – A senate committee advanced a bipartisan wage theft bill that would codify “wage theft,” the act of an employer withholding or denying compensation, within state law. The legislation also creates a compliance program for employers.

Illinois – The house passed pay equity legislation, sending it to the senate for likely approval. The legislature has passed similar legislation over the past two sessions but the previous governor vetoed them. The new governor is expected to sign the measure into law.

Taxes

KansasThe legislature passed a tax package that includes language establishing that online marketplace providers must collect sales taxes on sales made by third-party vendors on their site.

Kentucky – The legislature passed a bill establishing that marketplace providers must collect sales taxes on sales made by third-party vendors on their site.

New Mexico – The legislature passed a tax package that includes language establishing that online marketplace providers must collect sales taxes on sales made by third-party vendors on their site.

Oklahoma – The senate passed a bill establishing that marketplace providers must collect sales taxes on sales made by third-party vendors on their site.

Rhode Island – The senate passed a bill establishing that marketplace providers must collect sales taxes on sales made by third-party vendors on their site. The bill also includes language that mandates out-of-state sellers with more than $100,000 in sales or over 200 transactions per year must collect and remit the state’s sales tax on sales to in-state customers.

Miscellaneous 

Philadelphia, PA – The mayor signed an ordinance requiring all retailers to accept cash payment. The city council quickly advanced the ordinance in reaction to a local advocacy campaign against a cashless Amazon store that was slated to open.

Key Takeaways

  • The announcement by McDonald’s regarding their new gender equity program should be watched closely by all brands. If McDonald’s is able to significantly move the needle in this space, it could give a tremendous boost to the industry’s messaging as “an industry of opportunity.” It could also begin to shed light on what other brands are doing – or potentially not doing – in this space.

 

  • As Republicans in Congress begin to push their national paid leave proposals, the industry and individual companies are likely to be pressured by Hill sponsors to signal their support. Last year, Senator Rubio’s office was directly reaching out to leading brands trying to get them on board. Companies need to follow the process closely and anticipate similar requests this year as well as prepare meaningful responses.

Legislature Status for Week of 3/18/19

  • The United States Senate is in recess this week
  • The United States House is in recess this week
  • Forty-six state legislatures are in regular session:
    • AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, ME, MD, MA, MI, MN, MS, MT, NE, NV, NH, NJ, NY, NC, ND, OH, OK,OR, PA, RI, SC, TN, TX, VT, WA, WI, WV

Podcast

Check out our Working Lunch podcast each week that includes further analysis into these legislative issues, policy, politics and much more. You can find Working Lunch on the Nation’s Restaurant News website, or by clicking here, and when you download the podcast and subscribe on iTunes here.

 

The Regulatory Wrap-Up is presented by Align Public Strategies. Click here to learn how Align can provide your brand with the counsel and insight you need to navigate the policy and political issues impacting retail.

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